Gotcha! Chris Corrigans airline duoploly becomes reality

Chris Corrigan has beaten Sir Richard Branson to seize control of Aussie Airline Virgin Blue, after a hostile $1.1billion  on Friday tipped the holding of his company Patrick Corp to 50.26%

So what does that mean?

Basically it means that Corrigan is now in a cosy airline duopoly with Qantas; so two things are certain; 1, airfares will go up and, 2, services to some "unprofitable" routes will be canned.  Corrigan has already signaled that he is not a fan of price wars with rival Jetstar, and he wants to stop the cost-cutting and concentrate on flying the most profitable routes. 

And if Virgin opts out of it's price war with Qantas, it won't be long till (the Qantas owned) Jetstar starts lifting its prices too.

So, he  can get now get busy rebuilding the glory days of Qantas vs. Ansett....Remember?   When it cost $300 to fly to Sydney rather than $100.  And airline proprietors were making big fat profits...

But more than that, the takeover also means that his company, Patrick Corp, have an unparalleled transport empire encompassing land, sea and and now air (see an earlier post here).  So if businesses want to transport goods around Australia, Corrigan will get to clip the ticket at least once.

One the face of it his strategy is sound enough-a "wharf to door" distribution strategy; but do we want a monopolist in charge of the whole shebang?  Or, as I said in February, does it matter to the small Australian marketplace that is dominated by monopolists, duopolists and oligopolists if another industry is yanked away from a competitive marketplace?

And what does this mean for Richard Branson?  Dunno yet.  He might sell his remaining 25% into Patricks existing takeover bid (which he described as too low), or he might jump into bed with Paul Stoddarts Ozjet (thanks Greg!).  Or he might just piss off all together.  Here's hoping.

Comments

[numbat]

Each aircraft if four engine will have two engines removed , twin engine craft will lose one in an economy drive.Jets will convert to running on household kerosine mixed with used engine oil - cheaper you see. All second officers sacked - don't need two of the bludgers. A rotweiller in each cockpit to keep the pilot under control. All routes straightened out to save on the new cheap fuel. Plane staff to have wages halved and hours doubled. No seat belts, customers will be manacled to their fruit boxes er seats.Of course fares will be increased substantionally Regards, numbat